Term
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Definition
| a recurring set of business activities and related data processing operations associated with the purchase of and payment for goods and services |
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Term
| economic order quantity (EOQ) |
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Definition
| the optimal order size so as to minimize the sum of ordering, carrying, and stockout costs |
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Term
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Definition
| all expenses associated with processing purchase transactions |
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Term
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Definition
| the costs associated with holding inventory |
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Term
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Definition
| costs, such as lost sales or production delays, that result from inventory shortages |
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Term
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Definition
| the level to which the inventory balance of an item must fall before an order to replenish stock is initiated |
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Term
| materials requirements planning (MRP) |
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Definition
| an approach to inventory management that seeks to reduce required inventory levels by scheduling production to meet sales forecast demands, rather than estimating needs |
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Term
| just-in-time (JIT) inventory system |
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Definition
a system that minimizes or virtually eliminates manufacturing inventories by scheduling inventory deliveries at the precise times and locations needed
instead of making infrequent bulk deliveries to a central receiving and storage facility, suppliers deliver materials in small lots at frequent intervals at specific locations that require them |
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Term
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Definition
| a document that identifies the requisitoner, specifies the delivery location and date needed, identifies the item numbers, descriptions, quantity, and price of each item requested, and may suggest a vendor |
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Term
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Definition
a document that formally requests a vendor to sell and deliver specified products at designated prices
it is also a promise to pay and becomes a contract once the vendor accepts it |
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Term
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Definition
| a committment to purchase specified items at designated prices from a particular supplier for a set period of time, often 1 year |
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Term
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Definition
| a document that records details about each delivery, including the date received, shipper, vendor, and purchase order number |
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Term
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Definition
| a document used to record a reduction to the balance due to a vendor |
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Term
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Definition
| a method for processing accounts payable in which each approved invoice is posted to individual vendor records in the accounts payable file and is then stored in an open invoice file |
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Term
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Definition
| a method for processing accounts payable in which a disbursement voucher is prepared instead of posting invoices directly to vendor records in the accounts payable subsidiary ledger |
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Term
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Definition
the set of documents used to authorize payment to a vendor
it consists of a purchase order, receiving report, and vendor invoice |
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Term
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Definition
| a document that identifies the vendor, lists the outstanding invoices, and indicates the net amount to be paid after deducting any applicable discounts and allowances |
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Term
| evaluated receipts settlement (ERS) |
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Definition
an "invoiceless" approach to the accounts payable process
replaces the traditional three-way matching process (vendor invoice, receiving report, and purchase order) with a two-way match of the purchase order and receiving report
saves time and money by reducing the number of potential mismatches
also saves suppliers the time and expense of generating and tracking invoices |
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Term
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Definition
| gifts given by vendors to purchasing agents for the purpose of influencing their choice of suppliers |
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Term
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Definition
a cash account with two characteristics:
(1) it is set at a fixed amount, such as $100, and
(2) voucher are required for every disbursement
at all times, the sum of cash plus vouchers should equal the preset fund balance |
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Term
| Expenditure Cycle Business Activities |
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Definition
1) Ordering goods, supplies, and services
2) Receiving and storing goods
3) Pay for Goods and Services
4) Pay Approved Invoices
5) General |
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